Australia’s Macquarie in race to buy Deutsche Bank AM units

Macquarie Group, the Australian banking group, reportedly is one of at least three parties competing to buy the parts of Deutsch Bank Asset Management that were put up for sale late last year.

According to news provider Bloomberg, the deadline for second round bids is next week. Other bidders said to be in the frame are JPMorganChase & Co, State Street Corp and Ameriprise Financial.

News of their interest follows an announcement by Deutsch Bank in November revealing it was conducting a ‘strategic review’ of a big part of its asset management group, including its alternatives businesses – RREEF Real Estate, RREEF Infrastructure and DB Private Equity. The review of the asset management group also involved DB Advisors, which manages assets for clients such as pension funds, corporations, sovereign wealth funds and governments, and Insurance, in which Deutsche Insurance Asset Management provides investment and advisory services to insurance companies. A decision to sell the businesses was made in December.

For its part, Macquarie Group is trying to build up its asset management business, making Deutsche Bank Asset Management an obvious target. In 2010, the Australian group bought Philadelphia-based Delaware Investments, which has $165 billion of assets under management. At the time of announcing the deal, Macquarie said it was consistent with Macquarie’s strategy to develop a global asset management capability.

Shemara Wikramanayake, global head of Macquarie Funds Group which had $67 billion of assets, said: “Macquarie has a long and successful history in asset management. Since 1980 our asset management activities have grown both organically and through the addition of specialist asset management teams. From that strong base and given current opportunities in the market, we feel now is an ideal time to expand our reach and offering as an asset manager.”

Its real estate division includes the investment and management of unlisted real estate funds and fund managers as well as the investment and management of Australia, US and other global specialised listed real estate funds. Among its investments is a 56 percent stake in private equity real estate firm, MGPA. It also owns Macquarie Infrastructure and Real Assets (MIRA), which manages specialist funds which focus on infrastructure, real estate and adjacent sectors and had $68 billion of assets as of September 2010.

Whoever eventually ends up owning RREEF Real Estate would inherit a platform with 600 professionals and around €41.8 billion of property assets as of 31 March 2011. Within the portfolio are core, value-added, securities and opportunistic assets, though most assets are in core real estate and securities. Some €22 billion of its property under management are in the Americas, while €16.6 billon is in Europe, and €3.4 billion in Asia Pacific.